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The inexorable expansion of the False Claims Act (“FCA”) to cover virtually all types of cybersecurity breaches and violations – to include allegedly poor practices and failure to fully adhere to security controls – continues. At one time, an organization might have thought that it was unlikely to face a potential FCA investigation and litigation relating to its cybersecurity practices. That day is long past. Two recent FCA settlements illustrate the expansion: one is the first cybersecurity FCA settlement relating to healthcare Quality System Regulations (“QSR”) and the other involves the first settlement with a defense contractor that also pulls in its private equity owner.Continue Reading The Expanding Scope of FCA-Cybersecurity Liability

A federal district court in the Middle District of Florida issued a decision on Sept. 30th that threatens the federal government’s continued reliance on the False Claims Act (“FCA”) as the most powerful weapon in the Department of Justice’s enforcement arsenal. U.S. District Judge Kathryn Kimball Mizelle threw out a case against a group of Medicare Advantage organizations and providers on the grounds that an individual whistleblower suing on behalf of the federal government under the FCA, often called a “relator” in a “qui tam” lawsuit, violates the U.S. Constitution’s “appointments clause.” The Court concluded that relators, who are acting on behalf of the federal government, must be considered officers of the government and appointed in a manner consistent with Constitutional requirements. See U.S. ex rel Zafirov v. Florida Medical Associates, LLC, No. 8:19-cv-1236, 2024 U.S. Dist. LEXIS 176626, ECF No. 346 (M.D. Fl. Sept. 30, 2024).Continue Reading FCA Whistleblowers – No More?

In the high-stakes realm of False Claims Act (FCA) litigation per-claim penalties can reach daunting levels that dwarf even treble damages. A recent ruling from the Eighth Circuit Court provides valuable guidance on the limits of penalties under the Constitution’s Excessive Fines Clause (Clause). In Grant ex rel. United States v. Zorn the Eighth Circuit provides clarity applying the Clause in FCA litigation, specifically identifying when a penalty for purely economic loss offenses might be considered excessive. Of relevance, the Court held that:Continue Reading There Are Limits! Reining In FCA Penalties Pursuant to the Excessive Fines Clause

On November 6, 2023, the Centers for Medicare and Medicaid Services (“CMS”) released the contract year 2025 proposed rule for Medicare Advantage (“MA”) organizations and Part D sponsors (the “Proposed Rule”). The Proposed Rule covers an array of regulatory topics including the Star Ratings program, marketing and communications, agent and broker compensation, health equity, dual eligible special needs plans (“D-SNPs”), utilization management, network adequacy, and access to biosimilars.Continue Reading CMS Promotes Competition, Transparency, Health Equity and More in the CY2025 Medicare Advantage and Part D Proposed Rule

The COVID-19 Pandemic wreaked havoc on many businesses. For others, though, it created new opportunities to sell to the federal government, including an unprecedented demand for personal protective equipment (“PPE”), COVID tests, and vaccines. Perhaps your company found itself as a first-time government contractor, or you started selling products to the government that you had never sold before. If your government contract went smoothly, congratulations! If not, you may be left wondering who will pay for unexpected increased costs of performance, or how you can defend against the government’s claims to recoup overpayments or liquidated damages. Continue Reading Don’t Leave Money on the Table from Your Pandemic-Era Healthcare Procurement Contract

The government buys billions of dollars in healthcare-related goods and services every year, and no government procurement is perfect. In a business where every contract award matters, healthcare contractors should be aware that they may have a second chance at winning a contract if the government agency made a material error in its procurement process. The question disappointed healthcare contractors should ask is whether the agency acted unreasonably in its evaluation and selection of the awardee. If the answer is “yes”—or even “maybe”—healthcare companies may file a bid protest at the Government Accountability Office (“GAO”) or the U.S. Court of Federal Claims (“COFC”) challenging the award. If successful, the agency will often need to reevaluate proposals and make a new award, giving protestors another opportunity to be selected.Continue Reading A Second Chance to Win Your Government Healthcare Contract

Companies regularly are required to interpret ambiguous and vague regulatory provisions. Today, the United States Supreme Court heard oral arguments in a pair of consolidated cases to determine whether a defendant’s subjective interpretation of an ambiguous regulation is relevant to determining the knowledge (or scienter) element of the False Claims Act or, as the Seventh Circuit held in the case below, that once a defendant can articulate an objectively reasonable interpretation its contemporaneously held subjective belief is irrelevant to the knowledge inquiry. The issue is a significant one for both the government and relators on one side, and potential defendants on the other, as False Claims Act (FCA) liability imposes treble damages and penalties exceeding $20,000 per claim as well as relators’ attorneys’ fees and costs.Continue Reading Supreme Court Hears Arguments on False Claims Act Scienter Standard

On January 30, 2023, the Centers for Medicare & Medicaid Services (“CMS”) released the long-delayed final rule on risk adjustment data validation (“RADV”) audits of Medicare Advantage (“MA”) organizations (the “Final Rule”). CMS promotes the Final Rule as improving program integrity and payment accuracy as well as transparency and certainty. One thing that is certain, CMS can expect further challenges to its RADV audit methodology.Continue Reading CMS Issues Long-Awaiting Medicare Advantage RADV Final Rule

Just in time for the holidays, the Centers for Medicare and Medicaid Services (“CMS”) issued the Contract Year 2024 Proposed Rule for Medicare Advantage organizations (“MAOs”) and Part D sponsors (the “Proposed Rule”). The Proposed Rule includes changes on an array of topics including: Star Ratings, medication therapy management, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, behavioral health services, identification of overpayments, requirements for valid contract applications, and formulary changes. Continue Reading CMS Issues CY2024 Proposed Rule for Medicare Advantage Organizations and Part D Sponsors